A group of 12 Democratic state attorneys general is suing to block Paramount Skydance‘s merger with Warner Bros. Discovery — arguing the transaction violates antitrust law by giving the combined company undue power in three markets: wide-release theatrical distribution, tentpole movies and basic cable TV.
Paramount says the suit “distorts settled antitrust law” and that the company will “vigorously” fight the challenge. Late Monday, the states filed a motion seeking a temporary restraining order that would halt the proposed Paramount-WBD merger pending the outcome of their antitrust litigation. Separately, on Tuesday the WGA sued to block Paramount’s deal for Warner Bros., arguing it would reduce pay for writers and limit job opportunities.
So do the state AGs have a case — and could it result in Paramount having to make certain guarantees or concessions to get the Warner Bros. deal done?
The lawsuit alleges that Paramount-WBD’s scale of monopolization would be around (or just under) 30% for each of the three markets, which is the bare-minimum threshold historically needed to win an argument that such consolidation will harm market participants.
On its face, the state AGs’ case is a strong one, said Sam Weinstein, professor at the Cardozo School of Law and former DOJ antitrust attorney. “It’s not a frivolous complaint. If they can support what they say, it’s a compelling case,” he said, adding as a caveat that it remains to be seen what evidence the states will present to support their claims.
